Wind farms are not the only power plants in need of support

» By | Published 19 Aug 2010

By guest blogger, Tuuliki Kasonen-Lins
Estonian Wind Power Association

Recently there have been several articles in the Estonian media concerning the excessive price of renewable energy that consumers have to pay, and giving the cause as the highly expensive investments in wind energy. It has been forgotten though that every new power plant needs subsidising and wind farms have been the only power plants built in our country in recent years. Indeed, the investments in oil shale plants constructed during Soviet times do not appear on the energy bills of today’s consumers.

The Estonian Parliament recently validated the subsidies for two new oil shale plants (600MW), which proves that every new power plant needs financial support from the Government for the period of repaying long-term loans. Otherwise such huge investments would not be made and power plants would not be built. Subsidies are also given to cogeneration (CHP) and biomass plants. Newcomers just cannot compete with the existing competitors in the free electricity market. Therefore the discussion cannot be only about subsidising wind farms but also every other new power plant.

However, we should bear in mind the fact that subsidising wind energy is temporary – only during the first 12 years- and after that it will be the cheapest production method of energy in the market. The subsidising period of new oil shale plants planned in Estonia lasts for 20 years and unlike with wind farms it has to be paid even during the time when the plant is not generating electricity. For example, if the high taxation of CO2 emissions drives up the price of oil shale and new oil shale plants cannot sell electricity on the market, they will still be subsidised.

Categories: Climate change